Drafting Decisions and the Salary Cap 2015

Normally this time of year I’ll do some different financial looks at the draft and ways to price draft picks, so here we go with this year’s entry.  The idea for this actually came from a post on Chase Stuart’s Football Perspective where there was a consideration as to how much, in terms of cap room, would a team creatively give up to acquire a draft pick.  While there are a lot of different ways to look at that question I thought it might be worthwhile to try to actually compare the expected rookie performance over a 4 year period with a comparable veteran player performance over the same time period. Using the veteran player’s contract as a “market price” we can re-value a draft pick in veteran dollars.

The Metrics

I went back and forth with a few ways to compare players, which is by no means easy in the NFL. It came down to either using my games/games started/honors matrix or Approximate Value as defined by Pro Football Reference. I decided to use AV for this since I think games/starts won’t be a fair barometer for veteran NFL players who are already proven to be gameday active most weeks whereas many rookies, specifically later round rookies, are not given  that opportunity.

Secondly I wanted to only look at four year windows since the four year period is our rookie contract length. While first rounder’s have fifth year options, those prices are based on a veteran marketplace so I didn’t think that would be used in the evaluation. So when we look at AV we are looking at a draft picks AV from year 1-4 in his NFL career and a veteran’s AV from year 5 onward.

I looked at every draft from 1994 through 2011 and compiled the combined AV for every draft pick made in that time frame. Each slot was then broken into quartiles to determine performance ranges that we can expect for the players. We set our upper limits using the IQR for each slot (the lower limit in almost all cases was going to be 0). Originally I was going to adjust for outliers but once I started looking at the data in many cases that didn’t seem to make sense since there is no logical reason for say a player drafted at 13 to be an outlier for that individual selection but be fine for pick 14-20.

Similarly I looked at every veteran player that has been in the NFL since 2011 and determined their combined AV for that four year period. Each player’s APY was then used as the salary basis for the player. The one limitation of that is that for some players that had multiple contracts over that time period I am using their most current negotiated deal. While that may not be perfect I think for the sake of these posts it’s fair to use. For players with a 0 AV quartile I used the cap charge vet minimum salary plus full bonus ($665K).

The Salary Calculation

With that data we can now create a matrix that allows us to determine the average veteran salary that corresponds to the expected AV range for each draft pick. There are different ways to use the financials, which I’ll touch on in some later posts, but the most basic method is to simply average the dollars across each quartile.

So let’s look at the number 1 overall pick for a quick overview of how the process works:

Draft Pick AV Range Avg. Veteran Salary Per Year
47.8-84 $14,370,613
34.5-47.8 $7,440,532
23.8-34.5 $4,324,613
0-23.8 $1,975,572
TOTAL $7,027,833

What those numbers tell us is that we have a 25% chance of drafting a player whose AV will be above 47.8 over the first four seasons of his career. Veterans in the NFL who accounted for totals in that range had an average salary of $14.37 million per year.  The team has a 25% chance of drafting a player worth $7.44 million, a 25% chance of drafting a player worth $4.325 million, and finally a 25% chance of drafting a player worth $1.975 million.   That averages to a bit over $7 million a year, which is the expected return for a player deemed worthy of a number 1 pick.

Because we get some fluky draft results, such as draft pick number 10 performing far worse than a pick after, I wanted to smooth the expectations by taking a forward average approach. This should take into account the fact that every team selecting in a given slot is likely considering drafting a player valued a few spots ahead. This also makes pretty much all our individual outliers that don’t make much intuitive sense to classify that way fit in with the expected results with few exceptions.

This was a purely subjective decision on my part just based on how we often hear draft grades give or mock draft debates on decisions.  I’d be more than happy to adjust results based on alternate draft possibilities if people had any ideas on the subject. Here is the way I broke things down:

Draft Picks Forward Average Range
1-2 2 picks
3-5 3 picks
6-32 4 picks
33-97 5 picks
98-255 8 picks

Here is what our results look like using that formula

NFL Draft Value

We can further (really we could have just done this initially) work with the data by determining a best fit line to use to calculate the draft pick value in terms of veteran dollars, which I will do in the following sections.

The Draft Pick Benefit

In the coming days we will look at a few different ways to interpret the numbers, but for this post let’s look at where the draft is most underpriced.

NFL Draft Value Chart

The biggest benefit to drafting in the NFL is the top of the second round.  This is somewhat expected as the NFL put a relatively large devaluation between the end of the 1st and start of 2nd round despite there being little difference in performance.  The top four picks in the second round are expected to give a team about $1.65 million per year in benefits. I was a bit surprised to see the top picks of the third round providing similar discounted prices. A team is essentially getting $2.5 million in value for just  $750,000 per year. The 16th pick in the draft is our initial first rounder to make the list, adding about $1.6M in value. As I’ve discussed before the best values in that first round really come into play in the mid first round.

Our least value received comes with the 4th pick in the draft, which gives us just $320,000 in additional value. The fifth pick in the draft is also poor with just $400,000 in benefits. These rank with all the 7th round picks that provide limited value.

As for the first pick, it is a mid value pick. A team gains about $1.2 million per year in benefits. It’s the best value among the top 7 picks in the draft, despite having the highest price tag.  When we go back and look at the old CBA it is pretty clear how overpriced those picks were. Sam Bradford, the final number one pick of the non-slotted system, would have been overpriced by about $5.2 million per year.  To justify that pick you would have had to be one of the top picks ever at the position.

We can also look at the charts to better identify the gain that teams realize by being awarded compensatory draft selections. A third round pick is worth close to $2 million per year in true value and the team gains over $1.2 million per year in value. I think a team needs to strongly consider that when giving up comp picks for lower valued players. In general if you are in line for a 3rd-5th round comp you probably should protect that if possible.

The following chart shows the values per draft slot

Draft Pick True Value Actual Cost Gain
1 $6,784,935 $5,588,875 $1,196,061
2 $6,054,508 $5,341,650 $712,859
3 $5,627,236 $5,184,326 $442,911
4 $5,324,082 $5,004,526 $319,556
5 $5,088,937 $4,689,876 $399,061
6 $4,896,809 $4,128,001 $768,808
7 $4,734,368 $3,678,500 $1,055,868
8 $4,593,655 $3,229,001 $1,364,654
9 $4,469,537 $3,206,526 $1,263,011
10 $4,358,510 $3,082,913 $1,275,597
11 $4,258,074 $2,891,876 $1,366,198
12 $4,166,382 $2,622,175 $1,544,208
13 $4,082,035 $2,554,750 $1,527,285
14 $4,003,941 $2,442,375 $1,561,566
15 $3,931,238 $2,397,426 $1,533,812
16 $3,863,228 $2,262,575 $1,600,653
17 $3,799,343 $2,217,626 $1,581,717
18 $3,739,110 $2,161,439 $1,577,672
19 $3,682,135 $2,127,725 $1,554,411
20 $3,628,083 $2,116,488 $1,511,595
21 $3,576,669 $2,105,251 $1,471,418
22 $3,527,647 $2,082,774 $1,444,873
23 $3,480,804 $2,060,300 $1,420,504
24 $3,435,956 $2,015,350 $1,420,606
25 $3,392,938 $1,992,876 $1,400,063
26 $3,351,608 $1,970,401 $1,381,208
27 $3,311,838 $1,947,925 $1,363,913
28 $3,273,514 $1,936,688 $1,336,827
29 $3,236,536 $1,846,513 $1,390,023
30 $3,200,811 $1,798,758 $1,402,053
31 $3,166,257 $1,758,757 $1,407,500
32 $3,132,801 $1,733,001 $1,399,801
33 $3,100,375 $1,408,526 $1,691,849
34 $3,068,916 $1,397,287 $1,671,629
35 $3,038,369 $1,386,050 $1,652,320
36 $3,008,683 $1,363,576 $1,645,108
37 $2,979,811 $1,354,585 $1,625,226
38 $2,951,708 $1,334,359 $1,617,350
39 $2,924,336 $1,314,131 $1,610,205
40 $2,897,656 $1,296,151 $1,601,505
41 $2,871,636 $1,278,171 $1,593,465
42 $2,846,242 $1,257,943 $1,588,300
43 $2,821,446 $1,239,963 $1,581,483
44 $2,797,220 $1,222,831 $1,574,390
45 $2,773,539 $1,198,834 $1,574,705
46 $2,750,378 $1,172,986 $1,577,392
47 $2,727,715 $1,138,825 $1,588,890
48 $2,705,529 $1,116,351 $1,589,178
49 $2,683,801 $1,093,874 $1,589,927
50 $2,662,511 $1,071,400 $1,591,111
51 $2,641,644 $1,048,926 $1,592,718
52 $2,621,181 $1,026,450 $1,594,732
53 $2,601,109 $1,003,976 $1,597,133
54 $2,581,411 $981,501 $1,599,911
55 $2,562,075 $959,025 $1,603,050
56 $2,543,088 $947,788 $1,595,300
57 $2,524,436 $941,045 $1,583,392
58 $2,506,109 $929,808 $1,576,301
59 $2,488,095 $914,076 $1,574,019
60 $2,470,384 $907,333 $1,563,051
61 $2,452,966 $898,343 $1,554,623
62 $2,435,831 $891,600 $1,544,231
63 $2,418,970 $889,354 $1,529,616
64 $2,402,374 $884,858 $1,517,517
65 $2,386,036 $745,826 $1,640,210
66 $2,369,948 $744,394 $1,625,554
67 $2,354,101 $744,250 $1,609,851
68 $2,338,489 $742,708 $1,595,781
69 $2,323,105 $741,023 $1,582,082
70 $2,307,943 $737,813 $1,570,130
71 $2,292,995 $735,625 $1,557,370
72 $2,278,257 $734,081 $1,544,176
73 $2,263,721 $732,000 $1,531,721
74 $2,249,384 $730,969 $1,518,415
75 $2,235,239 $729,375 $1,505,864
76 $2,221,282 $724,868 $1,496,414
77 $2,207,506 $724,359 $1,483,147
78 $2,193,909 $723,450 $1,470,459
79 $2,180,485 $721,594 $1,458,891
80 $2,167,229 $719,719 $1,447,510
81 $2,154,139 $717,844 $1,436,295
82 $2,141,209 $716,517 $1,424,692
83 $2,128,436 $713,813 $1,414,623
84 $2,115,815 $711,890 $1,403,925
85 $2,103,344 $710,813 $1,392,531
86 $2,091,019 $708,986 $1,382,033
87 $2,078,837 $707,278 $1,371,559
88 $2,066,793 $706,345 $1,360,448
89 $2,054,886 $706,035 $1,348,851
90 $2,043,112 $705,880 $1,337,232
91 $2,031,468 $705,725 $1,325,743
92 $2,019,951 $704,950 $1,315,001
93 $2,008,558 $703,400 $1,305,158
94 $1,997,288 $701,850 $1,295,438
95 $1,986,137 $700,300 $1,285,837
96 $1,975,102 $698,750 $1,276,352
97 $1,964,182 $696,504 $1,267,678
98 $1,953,374 $696,504 $1,256,870
99 $1,942,675 $696,504 $1,246,171
100 $1,932,085 $694,257 $1,237,828
101 $1,921,599 $691,500 $1,230,099
102 $1,911,217 $691,106 $1,220,111
103 $1,900,936 $690,362 $1,210,574
104 $1,890,754 $689,250 $1,201,504
105 $1,880,670 $688,607 $1,192,063
106 $1,870,682 $688,172 $1,182,510
107 $1,860,787 $687,563 $1,173,224
108 $1,850,984 $686,888 $1,164,096
109 $1,841,272 $686,065 $1,155,207
110 $1,831,648 $684,114 $1,147,534
111 $1,822,112 $683,850 $1,138,262
112 $1,812,661 $683,400 $1,129,261
113 $1,803,294 $683,288 $1,120,006
114 $1,794,009 $682,725 $1,111,284
115 $1,784,806 $681,300 $1,103,506
116 $1,775,682 $680,845 $1,094,837
117 $1,766,637 $679,805 $1,086,832
118 $1,757,668 $678,716 $1,078,952
119 $1,748,776 $678,023 $1,070,753
120 $1,739,957 $677,325 $1,062,632
121 $1,731,212 $676,301 $1,054,911
122 $1,722,539 $675,027 $1,047,512
123 $1,713,937 $675,027 $1,038,910
124 $1,705,404 $673,977 $1,031,427
125 $1,696,940 $673,140 $1,023,800
126 $1,688,543 $671,903 $1,016,640
127 $1,680,213 $671,367 $1,008,846
128 $1,671,948 $670,135 $1,001,813
129 $1,663,747 $669,272 $994,475
130 $1,655,610 $667,875 $987,735
131 $1,647,535 $666,413 $981,122
132 $1,639,521 $645,146 $994,375
133 $1,631,568 $645,146 $986,422
134 $1,623,674 $645,146 $978,528
135 $1,615,839 $623,878 $991,961
136 $1,608,062 $623,403 $984,659
137 $1,600,342 $623,000 $977,342
138 $1,592,678 $622,763 $969,915
139 $1,585,070 $621,725 $963,345
140 $1,577,516 $620,493 $957,023
141 $1,570,016 $620,125 $949,891
142 $1,562,568 $619,750 $942,818
143 $1,555,173 $619,625 $935,548
144 $1,547,830 $619,500 $928,330
145 $1,540,537 $618,613 $921,924
146 $1,533,295 $618,200 $915,095
147 $1,526,102 $618,000 $908,102
148 $1,518,957 $617,938 $901,019
149 $1,511,861 $617,825 $894,036
150 $1,504,812 $617,790 $887,022
151 $1,497,810 $617,513 $880,297
152 $1,490,855 $617,220 $873,635
153 $1,483,945 $616,813 $867,132
154 $1,477,080 $616,685 $860,395
155 $1,470,259 $616,250 $854,009
156 $1,463,482 $616,048 $847,434
157 $1,456,749 $615,606 $841,143
158 $1,450,058 $615,413 $834,645
159 $1,443,410 $614,633 $828,777
160 $1,436,803 $614,527 $822,276
161 $1,430,237 $614,125 $816,112
162 $1,423,712 $612,870 $810,842
163 $1,417,227 $612,215 $805,012
164 $1,410,782 $611,200 $799,582
165 $1,404,376 $610,700 $793,676
166 $1,398,009 $610,075 $787,934
167 $1,391,680 $606,140 $785,540
168 $1,385,388 $606,140 $779,248
169 $1,379,135 $606,140 $772,995
170 $1,372,918 $606,140 $766,778
171 $1,366,737 $606,140 $760,597
172 $1,360,592 $606,140 $754,452
173 $1,354,484 $606,140 $748,344
174 $1,348,410 $606,140 $742,270
175 $1,342,371 $606,140 $736,231
176 $1,336,366 $606,140 $730,226
177 $1,330,396 $602,205 $728,191
178 $1,324,459 $601,279 $723,180
179 $1,318,556 $600,775 $717,781
180 $1,312,685 $600,150 $712,535
181 $1,306,847 $599,483 $707,364
182 $1,301,041 $598,947 $702,094
183 $1,295,267 $598,556 $696,711
184 $1,289,524 $598,363 $691,161
185 $1,283,812 $598,000 $685,812
186 $1,278,132 $597,625 $680,507
187 $1,272,481 $597,515 $674,966
188 $1,266,861 $596,918 $669,943
189 $1,261,271 $596,550 $664,721
190 $1,255,710 $596,450 $659,260
191 $1,250,178 $596,327 $653,851
192 $1,244,675 $596,213 $648,462
193 $1,239,201 $596,055 $643,146
194 $1,233,755 $596,018 $637,737
195 $1,228,337 $595,966 $632,371
196 $1,222,947 $595,947 $627,000
197 $1,217,584 $595,788 $621,796
198 $1,212,249 $595,550 $616,699
199 $1,206,940 $595,418 $611,522
200 $1,201,658 $595,075 $606,583
201 $1,196,402 $594,724 $601,678
202 $1,191,172 $594,358 $596,814
203 $1,185,968 $594,250 $591,718
204 $1,180,790 $594,150 $586,640
205 $1,175,637 $593,513 $582,124
206 $1,170,509 $593,128 $577,381
207 $1,165,406 $592,750 $572,656
208 $1,160,328 $592,058 $568,270
209 $1,155,274 $589,670 $565,604
210 $1,150,244 $589,670 $560,574
211 $1,145,237 $589,670 $555,567
212 $1,140,255 $589,670 $550,585
213 $1,135,296 $589,670 $545,626
214 $1,130,360 $589,670 $540,690
215 $1,125,448 $589,670 $535,778
216 $1,120,558 $589,670 $530,888
217 $1,115,690 $587,281 $528,409
218 $1,110,845 $587,225 $523,620
219 $1,106,022 $586,875 $519,147
220 $1,101,222 $586,741 $514,481
221 $1,096,442 $586,287 $510,155
222 $1,091,685 $585,933 $505,752
223 $1,086,949 $585,682 $501,267
224 $1,082,234 $585,612 $496,622
225 $1,077,540 $585,562 $491,978
226 $1,072,867 $585,455 $487,412
227 $1,068,214 $585,150 $483,064
228 $1,063,582 $585,064 $478,518
229 $1,058,971 $585,062 $473,909
230 $1,054,379 $584,856 $469,523
231 $1,049,807 $584,850 $464,957
232 $1,045,255 $584,793 $460,462
233 $1,040,723 $584,462 $456,261
234 $1,036,210 $584,212 $451,998
235 $1,031,716 $583,988 $447,728
236 $1,027,241 $583,403 $443,838
237 $1,022,786 $582,848 $439,938
238 $1,018,349 $582,720 $435,629
239 $1,013,930 $582,588 $431,342
240 $1,009,530 $582,456 $427,074
241 $1,005,149 $582,358 $422,791
242 $1,000,785 $582,250 $418,535
243 $996,440 $582,150 $414,290
244 $992,112 $582,050 $410,062
245 $987,802 $581,898 $405,904
246 $983,510 $581,787 $401,723
247 $979,235 $581,628 $397,607
248 $974,977 $581,474 $393,503
249 $970,736 $581,474 $389,262
250 $966,513 $581,474 $385,039
251 $962,306 $581,474 $380,832
252 $958,116 $581,474 $376,642
253 $953,943 $581,474 $372,469
254 $949,786 $581,474 $368,312
255 $945,645 $581,474 $364,171

Updating the Trade Value Chart

By using our expected salary values we can now create a new trade value chart that can be used to evaluate a trade.  With each player we can determine salary above replacement (again the 665K veteran) and re-assign the old trade value chart which overvalues the top picks by too much. However this is only part of the puzzle, which we’ll focus on a in part 2 later this week.

Draft Pick New Trade Value Old Trade Value
1 1106 3000
2 974 2600
3 897 2200
4 842 1800
5 800 1700
6 765 1600
7 736 1500
8 710 1400
9 688 1350
10 668 1300
11 649 1250
12 633 1200
13 618 1150
14 604 1100
15 590 1050
16 578 1000
17 567 950
18 556 900
19 545 875
20 536 850
21 526 800
22 517 780
23 509 760
24 501 740
25 493 720
26 486 700
27 478 680
28 472 660
29 465 640
30 458 620
31 452 600
32 446 590
33 440 580
34 435 560
35 429 550
36 424 540
37 418 530
38 413 520
39 408 510
40 404 500
41 399 490
42 394 480
43 390 470
44 385 460
45 381 450
46 377 440
47 373 430
48 369 420
49 365 410
50 361 400
51 357 390
52 354 380
53 350 370
54 346 360
55 343 350
56 339 340
57 336 330
58 333 320
59 330 310
60 326 300
61 323 292
62 320 284
63 317 276
64 314 270
65 311 265
66 308 260
67 305 255
68 302 250
69 300 245
70 297 240
71 294 235
72 292 230
73 289 225
74 286 220
75 284 215
76 281 210
77 279 205
78 276 200
79 274 195
80 272 190
81 269 185
82 267 180
83 265 175
84 262 170
85 260 165
86 258 160
87 256 155
88 253 150
89 251 145
90 249 140
91 247 136
92 245 132
93 243 128
94 241 124
95 239 120
96 237 116
97 235 112
98 233 108
99 231 104
100 229 100
101 227 96
102 225 92
103 223 88
104 222 86
105 220 84
106 218 82
107 216 80
108 214 78
109 213 76
110 211 74
111 209 72
112 207 70
113 206 68
114 204 66
115 202 64
116 201 62
117 199 60
118 198 58
119 196 56
120 194 54
121 193 52
122 191 50
123 190 49
124 188 48
125 187 47
126 185 46
127 184 45
128 182 44
129 181 43
130 179 42
131 178 41
132 176 40
133 175 39.5
134 173 39
135 172 38.5
136 170 38
137 169 37.5
138 168 37
139 166 36.5
140 165 36
141 164 35.5
142 162 35
143 161 34.5
144 160 34
145 158 33.5
146 157 33
147 156 32.6
148 154 32.2
149 153 31.8
150 152 31.4
151 151 31
152 149 31.8
153 148 31.2
154 147 30.8
155 146 30.4
156 144 30
157 143 29.6
158 142 29.2
159 141 28.8
160 140 28.4
161 138 28
162 137 27.6
163 136 27.2
164 135 26.8
165 134 26.4
166 132 26
167 131 25.6
168 130 25.2
169 129 24.8
170 128 24.4
171 127 24
172 126 23.6
173 125 23.2
174 124 22.8
175 122 22.4
176 121 22
177 120 21.6
178 119 21.2
179 118 20.8
180 117 20.4
181 116 20
182 115 19.6
183 114 19.2
184 113 18.8
185 112 18.4
186 111 18
187 110 17.6
188 109 17.2
189 108 16.8
190 107 16.4
191 106 16
192 105 15.6
193 104 15.2
194 103 14.8
195 102 14.4
196 101 14
197 100 13.6
198 99 13.2
199 98 12.8
200 97 12.4
201 96 12
202 95 11.6
203 94 11.2
204 93 10.8
205 92 10.4
206 91 10
207 90 9.6
208 90 9.2
209 89 8.8
210 88 8.4
211 87 8
212 86 7.6
213 85 7.2
214 84 6.8
215 83 6.4
216 82 6
217 81 5.6
218 81 5.2
219 80 4.8
220 79 4.4
221 78 4
222 77 3.6
223 76 3.3
224 75 3
225 75 2.9
226 74 2.8
227 73 2.7
228 72 2.6
229 71 2.5
230 70 2.4
231 70 2.3
232 69 2.2
233 68 2.1
234 67 2
235 66 1.9
236 65 1.8
237 65 1.7
238 64 1.6
239 63 1.5
240 62 1.4
241 61 1.3
242 61 1.2
243 60 1.1
244 59 1
245 58 0.95
246 58 0.9
247 57 0.85
248 56 0.8
249 55 0.75
250 55 0.7
251 54 0.65
252 53 0.6
253 52 0.55
254 51 0.5
255 51 0.45